IBM, Apple: Stark Contrasts in CEO Succession

IBM's selection of Virginia Rometty as its next CEO is a testament to Big Blue's corporate culture, and will make the transition easier than what Apple may experience in the wake of Steve Jobs' death, analysts say.

IBM and Apple, both hugely successful
companies that are undergoing a change in top leadership, are a study in
contrasts when looking at their CEOs and how they're replacing them, according
to analysts.
Apple for more than a decade was led by
the charismatic Steve Jobs, who co-founded the company in the 1970s, was kicked
out in the 1980s and returned in the 1990s to lead it to incredible heights,
making it the most valuable company in the world. Jobs
was the driving force behind such ground-breaking products as the iPod,
iPhone and iPad, and his passing earlier this month threatens to leave a
significant hole in Apple's future.

At IBM, Sam Palmisano has guided the
company for about the same amount of time, pushing the tech giant into such
areas as cloud computing and analytics, and driving its Smarter Planet
initiative. Under Palmisano's leadership, IBM has pursued high-margin
technologies-shedding such commoditized businesses as PCs-while weathering some
difficult economic times.

Now both companies are moving forward
with new CEOs. Former Apple COO Tim
Cook has taken the reins at Apple-he was appointed CEO in August, after
Jobs resigned due to his deteriorating health-while Virginia
Rometty, IBM's senior vice president and global sales leader, will take
over at Big Blue Jan. 1, 2012. However, while Jobs' passing has shaken Apple
and generated some angst in the industry over how the company will fare going
forward, IBM's selection of Rometty-and the positive feedback it's received in
the industry-is an example of IBM's historically strong succession planning,
according to analysts.
It also shines a harsh light on the
recent difficulties
at rival Hewlett-Packard, which now is operating under its third CEO in a
year and fourth in just over a decade, starting with Carly Fiorina, who was
followed by Mark Hurd, Leo Apotheker and, now, Meg Whitman. And unlike IBM, HP
has gone outside the company to find its CEOs, all of whom met with varying
degrees of success.
"IBM has one of the strongest
institutionalized succession plans of any company in the world," Rob
Enderle, principal analyst at The Enderle Group, said in an email to eWEEK. "This is largely why it is
one of the few firms that has lasted a century. It got off plan in the '90s,
but Sam put it back on plan and Rometty's selection was consistent with this
century-long program."
That contrasts sharply with Apple,
whose identity was tightly tied to Jobs, according to Enderle and Charles King,
principal analyst with Pund-IT Research.
"The differences between Apple and
IBM in leadership/change couldn't be starker," King wrote in an email. "Apple
was (and likely would still like to be) a company led by a lone, powerful,
charismatic chief executive. The fact is that executive succession plans are a
fact of life in corporations-no one lives forever. Apple's refusal to create or
put into place a formal plan, even after Jobs' health became a matter of public
record, was frankly at odds with the best interests of its shareholders."